Yesterday, I asked if anyone was interested in sharing their plans for early retirement. TL Black, whom you may know from the comments on this blog and who blogs on The Simple Life in France, was quick to respond, and so here is her story.
In 2006, we made $100,000 a year and spent $30,000 or about $2,500 a month. Our goal: to buy house in the French countryside in three years, cash.
I wondered if I could survive three years. The pressure of my career compounded by the increasing philosophical dissonance I felt at work made me sick—literally. When you spend 60-70 hours a week working and your spare time at the doctor’s trying to deal with stress-related illnesses, your are on borrowed time.
We’d already figured out that the extra money and consumer benefits couldn’t make us happy—or even distract us from our misery. We’d long since cut way back on eating out, shopping, and keeping lots of crap around. Every day, I had a harder time justifying our lifestyle.
In January 2007 I just snapped. I told my husband I was going to look for a much less stressful job—I found one very shortly and took a significant pay cut. My husband values my health and happiness more than his dream of a big house, so he supported my decision.
“Why not move to France now?” That was his response to my third-life crisis.
For years we’d been putting off returning to DH’s home country because of the money my career brought in—and, frankly, because of my need to identify myself as a ‘professional’ and a ‘hard-worker.’ Well, to hell with all that, is what I finally decided. We gave our notice, sold our stuff and moved back overseas.
Our financial plan now that we’re over the ‘big house dream’: retire ASAP.
Use our current savings (thankfully in Euros!) to buy a small home within the next few years. I vote for buying ‘cash.’ DH votes for taking out a loan that would lead to expenses no more than 650 euros a month (our current rent), so we can afford a place with some land. Given the current state of the global economy and environment, having your own land for growing food sounds wiser all the time, but we’ll see.
Take advantage of my time without work to rethink the way we spend money. This is a project I’ll be working on full-time for the next few months. Our initial goal was to make it on only my husband’s salary. We did this easily in October even with a 300 euro “fun” category. Our next step is to start saving on DH’s salary alone. Within 6 months, I hope to have us saving 500 euros a month and closer to 800-1,000 euros a month in a year’s time.
In the next year I hope to find an income source of about 800 euros a month. Why so low? So that I can afford to do something that won’t make me wish I were dead—perhaps even starting my own business. If I can make more without becoming a miserable human being again, then I’m not against that either.
How long will it take?
Assuming we keep expenses low, and that I find an income source in the near-future, AND assuming we continue to be able to make a 4% return on our investment* we’ll need roughly 300,000 to retire with1200 euros/month. That’s slightly less than what we can get by with now because we won’t need a car anymore once we’re no longer working.
IF DH agreed to buy an apartment ‘cash’ housing should cost us no more than 200 euros a month (we’ll need some money for taxes and maintenance). We ought to be able to retire in 10-12 years.
If we decided not to buy at all, I suppose we could get there even faster, but DH doesn’t like that plan for now. I say, let the man have his dreams. He compromises with me a lot.
*We’re not the savviest investors, just lucky so far. We need to learn some new tricks.